Archive for the ‘GST’ Category

Applying the GST to online purchases under $1,000 isn’t fair for people who cannot afford to travel outside the country to buy cheaper goods, an eBay executive has said.

While in Sydney for a meeting with the G20 taskforce that is looking at ways to reduce trade barriers — including taxes imposed on online sales — head of eBay’s government relations, Tod Cohen, said enacting the GST on purchases below $1,000 would turn sites like eBay and Amazon into tax collectors.

“Any time you get down to that type of threshold, you’re discriminating against Australians who can travel and those who can’t travel,” Cohen says.

“We try to maintain an opportunity for people to participate in the global marketplace and one of quickest ways to shut that down is by imposing taxes. There’s no way they’ll drop the threshold for international travellers. We’re not going to see duty-free shut down.”

Cohen says $1000 was a ­reasonable threshold, given the threshold in the United States was $800 and Europe was about the same.

Forrester predicts e-retail sales in these five Asia-Pacific markets will reach $768 billion in 2017, nearly 17% more than the $658 billion Forrester predicts in 2017 for the U.S., Canada and Western Europe combined. (Forrester has not yet issued 2018 e-commerce projections for the U.S. and Europe.)

The report states that Australian online retail sales will grow 10% per year from $23 billion in 2013 to $38 billion in 2018. Australians buy a lot from foreign online retailers, encouraged both by a relatively small number of domestic players and the fact that the first A$1,000 in purchases made from a foreign retailer enter the country duty-free. Purchases made under this exemption, the government reports, totaled $6.23 billion in 2011-12. More global brands are entering the online space in Australia, taking advantage of the relatively minor localization required for brands that operate in the United States or United Kingdom.

The Australia Business Review has revealed the top three hurdles for small businesses in Australia to overcome to be successful.

Photo credit; Tristan Honscheid on Flickr

1. In top spot is the challenge of cash flow and getting the necessary cash injection to start a business. Banks are less willing to invest in small businesses nowadays so it’s important to manage resources responsibly.

2. Navigating the Australia Tax Office (ATO) is the second most common hurdle for small businesses. Discrepancies that result from honest mistakes, and failure to comply with the many tax regulations can all lead to small businesses falling foul of the ATO.

Under current Fringe Benefits Tax laws, a company can find the ATO looking at it disapprovingly if it spends too much on an employee social gathering, while different types of tax have different tax years, leading to a lot of paperwork and confusion.

Thorough and meticulous bookkeeping and some time spent reading and grasping all the regulations are necessary navigate the ATO.

3. And, lastly, the Carbon Tax can be a pain for new businesses, especially those wanting to do their own production.

Under the scheme, companies considered as top polluters must pay a fee per tonne of carbon released into the atmosphere.

In addition to businesses that have a production arm, it also affects small businesses in terms of the rising cost of the supplies they need.

The carbon tax will be scrapped eventually, but it will be replaced by an emissions trading scheme. New start-ups will need to keep an eye on that, and allow for its effects upon their running costs.

Upscale Australian department store Myer is predicting that it will turn a profit from online sales for the first time in 2014, as it simultaneously revealed that its annual net profit fell by 9%.

Myer chief executive Bernie Brookes blamed generous penalty rates and wage costs under Labor’s Fair Work Act for a $10-$11 million negative impact on its $127.2 million profit.

He said he would consult the new coalition government about changing the act.

Photo credit; Matt Trostle on Flickr

“We’re hoping that in dialogue with the government we’re given the opportunity to express that we think stopping increases coming in is important,” he told reporters.

Brookes also cited the ability of overseas online retailers to escape 10 per cent GST on products was also an unfair “free kick” damaging local retailers who were Australia’s biggest private employers.

“We’re certainly hoping that Mr Abbott and his team have a big set of ears to what very much needs to change,” he said.

After growing profit in the first half, Myer’s costs blew out in the second half with the cost of doing business increasing 3.1 per cent to $1.01 billion of the year to July 27.

Those costs are expected to increase another 4-5% this fiscal year, with money pumped into online initiatives, new stores and refurbishments.

However, Brookes conceded that is likely to mean profit falls again in the current first half.

But online sales revenue should hit $50 million this year, making the business profitable, Mr Brookes said, before profit grows again in 2014/15 as the benefits of the current spending emerge.

Sydney Morning Herald reports today that developing technology for smartphones are working on ‘psychic’ smartphones. Intel researchers are working on a prototype application with Fodor’s Travel, which learns your favourite foods, where you like to visit and other such information using your GPS searches, and then makes recommendations when you visit new cities.

The techies have to train computers to look at ‘hard sensors’ data (location, voice patterns, temperature etc) and combine them with soft sensors such as calendar appointments. Obviously, privacy issues will arise which will also need to be dealt with as the software is developed further.

Almost scarily, Intel reports that is looking even further, a computer that can read your thoughts!